A bill of lading (sometimes referred to as a BOL or B/L) is a document issued by a carrier, e. A common carrier is a business that transports people goods or services and offers its services to the general public under license or authority provided by a regulatory body g. a ship's master or by a company's shipping department, acknowledging that specified goods have been received on board as cargo for conveyance to a named place for delivery to the consignee who is usually identified. In a Contract of carriage, the consignee is the person to whom the Shipment is to be delivered whether by land Sea or Air. A through bill of lading involves the use of at least two different modes of transport from road, rail, air, and sea. The term derives from the noun "bill", a schedule of costs for services supplied or to be supplied, and from the verb "to lade" which means to load a cargo onto a ship or other form of transport.
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Short statement of principle
The standard short form bill of lading is evidence of the contract of carriage of goods and it serves a number of purposes:
- It is evidence that a valid contract of carriage, or a chartering contract, exists, and it may incorporate the full terms of the contract between the consignor and the carrier by reference (i. A contract is an exchange of promises between two or more parties to do or refrain from doing an act which is enforceable in a court of law e. the short form simply refers to the main contract as an existing document, whereas the long form of a bill of lading (connaissement intégral) issued by the carrier sets out all the terms of the contract of carriage);
- It is a receipt signed by the carrier confirming whether goods matching the contract description have been received in good condition (a bill will be described as clean if the goods have been received on board in apparent good condition and stowed ready for transport); and
- It is also a document of transfer, being freely transferable but not a negotiable instrument in the legal sense, i. A negotiable instrument is a specialized type of " Contract " for the payment of money that is unconditional and capable of transfer by negotiation e. it governs all the legal aspects of physical carriage, and, like a cheque or other negotiable instrument, it may be endorsed affecting ownership of the goods actually being carried. A cheque (spelled check in American English) is a Negotiable instrument instructing a Financial institution to pay a specific amount of This matches everyday experience in that the contract a person might make with a commercial carrier like FedEx for mostly airway parcels, is separate from any contract for the sale of the goods to be carried, however it binds the carrier to its terms, irrespectively of who the actual holder of the B/L, and owner of the goods, may be at a specific moment.
Main types of bill
Straight bill of lading
This bill states that the goods are consigned to a specified person and it is not negotiable free from existing equities, i. e. any endorsee acquires no better rights than those held by the endorsor. So, for example, if the carrier or another holds a lien over the goods as security for unpaid debts, the endorsee is bound by the lien. In Law, a lien is a form of Security interest granted over an item of Property to secure the payment of a Debt or performance of some other Although, if the endorsor wrongfully failed to disclose the charge, the endorsee will have a right to claim damages for failing to transfer an unencumbered title. In Law, damages refers to the money paid or awarded to a Claimant (England Pursuer (Scotland or Plaintiff (US following a successful
Also known as a non-negotiable bill of lading.
Order bill of lading
This bill uses express words to make the bill negotiable, e. g. it states that delivery is to be made to the further order of the consignee using words such as "delivery to A Ltd. or to order or assigns". Consequently, it can be endorsed by A Ltd. or the right to take delivery can be transferred by physical delivery of the bill accompanied by adequate evidence of A Ltd. 's intention to transfer.
Also known as a negotiable bill of lading.
Bearer bill of lading
This bill states that delivery shall be made to whosoever holds the bill. Such bill may be created explicitly or it is an order bill that fails to nominate the consignee whether in its original form or through an endorsement in blank. A bearer bill can be negotiated by physical delivery.
Surrender bill of lading
Under a term import documentary credit the bank releases the documents on receipt from the negotiating bank but the importer does not pay the bank until the maturity of the draft under the relative credit. This direct liability is called Surrender Bill of Lading (SBL), i. e. when we hand over the bill of lading we surrender title to the goods and our power of sale over the goods.
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Other terminology
A sea or air waybill is a non-negotiable receipt issued by the carrier. A waybill is a document issued by a carrier giving details and instructions relating to the Shipment of a Consignment of goods. It is most common in the container trade either where the cargo is likely to arrive before the formal documents or where the shipper does not insist on separate bills for every item of cargo carried (e. g. because this is one of a series of loads being delivered to the same consignee). Delivery is made to the consignee who identifies himself. It is customary in transactions where the shipper and consignee are the same person in law making the rigid production of documents unnecessary.
The UK's Carriage of Goods by Sea Act 1992 creates a further class of document known as a ship's delivery order which contains an undertaking to carry goods by sea but is neither a bill nor a .
A straight bill of lading by land or sea, or sea/air waybill are not documents of title to the goods they represent. They do no more than require delivery of the goods to the named consignee and (subject to the shipper's ability to redirect the goods) to no other. This differs from an "order" or "bearer" bill of lading which are possessory title documents and negotiable, i. e. they can be endorsed and so transfer the right to take delivery to the last endorsee.
A sample of the issues
In most national and international systems, a bill of lading is not a document of title, and does no more than identify that a particular individual has a right to possession at the time when delivery is to be made. Problems arise when goods are found to have been lost or damaged in transit, or delivery is delayed or refused. Because the consignee is not a party to the contract of carriage, the doctrine of privity of contract states that a third party has no right to enforce the agreement. The doctrine of privity in Contract law provides that a Contract cannot confer rights or impose obligations arising under it on any person or agent except the parties A third party beneficiary, in the Law of Contracts, is a person who may have the right to sue on a contract despite not having originally been a party However, whether this is a problem to the consignee depends on who owns the goods and who holds the risks associated with the carriage. This will be answered by examining the terms of all the relevant contracts. If the consignor has reserved title until payment is made, the consignor can sue to recover his or her loss. But if ownership and/or the risk of loss has transferred to the consignee, the right to sue may not be clear in contract, although there could be remedies in tort/delict (the issue of risk will have been most carefully considered to decide who should insure the goods during transit). Tort law is the name given to a body of law that creates and provides remedies for civil wrongs that do not arise out of Contractual duties Delict is a concept of civil law in which a willful wrong or an act of negligence gives rise to a legal obligation between parties even though there has been no contract Hence, a number of international Conventions and domestic laws specifically address when a consignee has the right to sue. The legal solution most often adopted is to apply the principle of subrogation, i. Subrogation is the legal technique under the Common law by which one party commonly an insurer (I-X of another party (X steps into X's shoes so as to have the benefit of e. to give the consignee the same rights of action held by the consignor. This enables most of the more obvious cases of injustice to be avoided.
In the municipal law of the U. S. , the issue and enforcement of bills which may be documents of title, is governed by Article 7 of the Uniform Commercial Code. The Uniform Commercial Code ( UCC or the Code is one of a number of uniform acts that have been promulgated in conjunction with efforts to harmonize the law of However, since bills of lading are most frequently used in transborder, overseas or airborne shipping, the laws of whatever other countries are involved in the transaction covered by a particular bill may also be applicable including the Hague Rules, the Hague-Visby Rules and The Hamburg Rules at international level for shipping, The Warsaw Convention for the Unification of Certain Rules for International Carriage by Air 1929 and The Montreal Convention for the Unification of Certain Rules for International Carriage by Air 1999 for air waybills, etc. The Hague Conference on Private International Law (or HCCH for Hague Conference/Conférence de la Haye is the preeminent organisation in the area of Private international law The Hague-Visby Rules are a set of international rules for the carriage of goods by sea. The Hamburg Rules are a set of rules governing the international Shipment of goods resulting from the United Nations International Convention on the Carriage of Goods It is customary for parties to the bill to agree both which country's courts shall have the jurisdiction to hear any case in a forum selection clause, and the municipal system of law to be applied in that case choice of law clause. A forum selection clause in a contract with a Conflict of Laws element allows the parties to agree that any Litigation resulting from that contract will A choice of law clause or proper law clause in a contract is one in which the parties specify which Law (i The law selected is termed the proper law in private international law and it gives a form of extraterritorial effect to an otherwise sovereign law, e. The Doctrine of the Proper Law is applied in the Choice of law stage of a Lawsuit involving the Conflict of Laws. Conflict of laws (or private international law) is that branch of International law and intranational interstate law that regulates all Lawsuits involving Sovereignty is the exclusive Right to control a Government, a country, a people or oneself g. a Chinese consignor contracts with a Greek carrier for delivery to a consignee based in New York: they agree that any dispute will be referred to the courts in New York (since that is the most convenient place — the forum conveniens) but that the New York courts will apply Greek law as the lex causae to determine the extent of the carrier's liability. In the Conflict of laws, lex causae ( Latin: Lex + Causa, "cause the law" is the law or laws chosen by the Forum court from
Examples
- Southern Railway Company bill of lading (1906): front side, back side
Notes
References
- Huber, Mark (2001). "Ch. 9:Chartering and Operations", Tanker operations: a handbook for the person-in-charge (PIC). Cambridge, MD: Cornell Maritime Press. ISBN 0-87033-528-6.
- Turpin, Edward A. ; McEwen, William A. (1980). "Ch. 18:United States Navigation Laws and Ship's Business", Merchant Marine Officers' Handbook. Centreville, MD: Cornell Maritime Press. ISBN 0-87038-056-X.
See also
- Delivery order
- Mills, Stephen (2005). D/O is the abbreviation for the term Delivery Order. A delivery Order is a document from a Consignee, a Shipper, or an owner of Freight which Bills of Lading: A Guide to Good Practice (2nd ed. ), North of England P&I Association, Newcastle-upon-Tyne, UK, ISBN 0-9546537-1-8, http://www.anchoragepress.co.uk/bills.html.
External links
- Fill out a hazmat bill of lading on line. Begin by selecting or typing the Identification number
- Bill of Lading
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